CM Terms Union Budget 2026–27 a ‘Labyrinth of Neglect’, Slams Centre Over Unfair Fiscal Treatment to Himachal Pradesh.
Shimla:
Expressing strong dissatisfaction over the Union Budget 2026–27, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday described it as an anti-poor and anti-farmer budget that ignores the interests of key sections of society and fails to address the unique challenges of hill states. He termed the budget inequitable and accused the Union Finance Ministry of completely overlooking the priorities and concerns of Himachal Pradesh.
The Chief Minister also raised serious objections to the recently tabled Sixteenth Finance Commission (FC-XVI) Report for the period 2026–31, particularly criticizing its failure to provide meaningful Revenue Deficit Grants (RDGs) to the state. Despite repeated representations, detailed memoranda, and technical submissions by the state government, the Finance Commission has not recommended RDGs for small hill states, including Himachal Pradesh. Calling it a grave injustice, Sukhu said the decision has deeply hurt the sentiments of the people.
He pointed out that Article 275(1) of the Constitution provides for state-specific grants, commonly known as Revenue Deficit Grants, which were consistently extended to states from 1952 till the Fifteenth Finance Commission. “For the first time, the Sixteenth Finance Commission has discontinued this crucial support,” he said. Under the Fifteenth Finance Commission, Himachal Pradesh received RDGs amounting to nearly Rs. 37,000 crore, while even during the interim period after the Fourteenth Finance Commission, assistance of Rs. 11,431 crore was provided.
The Chief Minister lamented that the omission fails to acknowledge the state’s structural fiscal handicaps, including nearly 67 percent forest and ecological cover, higher per-capita cost of service delivery in mountainous terrain, and recurring natural disasters that have caused losses exceeding Rs. 15,000 crore in recent years.
CM Sukhu said the state had expected targeted support for hill-specific priorities such as hydropower development, eco-tourism, road and rail connectivity, and compensation for GST-related revenue losses. He cautioned that the absence of adequate RDGs would constrain the state’s ability to provide essential public services and could push it towards increased indebtedness.
Criticizing the budget further, the Chief Minister said it fails to address pressing national issues like unemployment, poverty, and rising prices. He expressed disappointment that apple growers, who contribute around Rs. 5,000 crore annually to the state’s economy, found no mention in the budget. He also highlighted the lack of meaningful initiatives for agriculture, inadequate support prices, and insufficient investment in modernization.
The Chief Minister pointed out that no allocation has been made for railway expansion projects in the state, including the long-pending Bhanupali–Bilaspur and Baddi–Chandigarh lines. He also said the demand to enhance the state’s loan limit from 3 percent to 4 percent has been ignored.
CM Sukhu further expressed concern over the absence of specific provisions for tourism infrastructure, despite Himachal Pradesh being home to world-renowned destinations. While welcoming the proposal for mountain trails, he said concrete benefits would depend on guidelines yet to be issued.
Calling for stronger fiscal support to hill states, the Chief Minister urged the Centre to adopt a more cooperative federal approach, emphasizing enhanced flexibility, ecological weightage in fiscal devolution, and a separate disaster risk framework for Himalayan states. He reiterated the state government’s commitment to fiscal prudence and appealed to the Union Government for constructive dialogue to ensure inclusive and region-balanced development.
